Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313466 
Year of Publication: 
2023
Citation: 
[Journal:] Journal of Banking and Financial Economics (JBFE) [ISSN:] 2353-6845 [Issue:] 19 [Year:] 2023 [Pages:] 1-25
Publisher: 
University of Warsaw, Faculty of Management, Warsaw
Abstract: 
Policymakers introduce bank levies (BLs) to reduce the probability of crises. In this study, we evaluate the effects of the Hungarian and German BLs implemented in 2010 and 2011, respectively, on the banks' risk-taking behavior. Our analysis compares two completely different BL designs. The German BL is designed to increase as banks' total liabilities increase, while the Hungarian BL is assessed on total assets. The results unambiguously demonstrate that a BL on assets increases banks' credit risk. The results of analyzing the influence that introducing BLs has had on the German banking sector demonstrate that BL on liabilities decreases banks' credit risk. An improved understanding of the impact of regulation on the risky activity of EU banks is very important for a wide range of financial market participants, including borrowers, shareholders regulators and supervisors, especially during turbulent times caused by the COVID-19 pandemic and the Russian war in Ukraine.
Subjects: 
bank levy
credit quality
banks
regulations
taxation
JEL: 
G010
G2
G28
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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